Healthcare practices have a core mandate — providing quality care for their patients. The undeniable truth is that these services usually come at a cost, and organizations need finances to flourish. Revenue cycle management (RCM) plays a crucial role in ensuring economic stability, but most organizations still need resources to streamline the process.
In this guide, we’ll discuss the healthcare revenue cycle flowchart and how automation can bring value to your practice. Rectangle Health has developed an advanced digital platform that streamlines the RCM process. Read on to learn more or contact one of our trusted agents with your inquiries.
What is revenue cycle management in healthcare?
RCM is the financial process healthcare organizations use to manage administrative and clinical functions regarding claims management, payments, and revenue generation. RCM encompasses various procedures that ultimately allow you to track payments received for services rendered. Staying financially healthy enables the organization to perform its primary responsibility — providing quality healthcare services to patients. Without financial stability, healthcare providers would likely face challenges running the facility.
RCM begins when a patient makes an appointment and ends when the organization collects payments. You can perform this task manually or use automated platforms, but the latter is preferred today. Digital RCM tools are convenient and efficient. They eliminate mundane tasks and reduce human errors, which saves money and time.
5 critical steps in revenue cycle management
Revenue cycle management for healthcare practices is a multistep process. It is essential to learn and apply these procedures to yield the desired results. Implementing effective RCM practices may seem daunting at first, but the entire process can be broken down into five simple steps:
1. Scheduling and preregistration
RCM starts when the patient schedules a medical appointment with the facility. At this stage, the healthcare provider takes the relevant information, such as demographics and insurance details, to determine the coverage, deductibles, and coinsurance. The provider can also use the information to ascertain whether to make a referral.
Preregistration is essential because it allows you to discuss financial matters at the outset, mitigating potential challenges. For example, it can give the practice a clear idea of how the patient would make payments, whether through a carrier, out-of-pocket, or both. Preregistration activities like insurance verification and authorization ensure patients receive the necessary care without delays.
2. Registration
During registration, the provider collects additional information, such as the patient’s address and biographic data. Collecting copayments and referring the patient to a specialist where necessary can also take place during the registration process. The purpose is to ensure accurate and complete payments for services rendered.
Other crucial aspects of the registration process are clinical documentation and coding. Clinical documentation involves creating and updating the patient’s medical records, whereas coding translates medical services into standardized alphanumeric codes. These processes enable you to provide quality healthcare, improve revenue integrity, and ensure compliance.
3. Payment capture
The next step in the RCM process is charging the patient for the services. Taking payments at the front desk at the time of service helps prevent collection backlog. As a recommendation, implement a standard policy for collecting copayments and deductibles to ensure the team is in line with the practice’s goals.
Most organizations automate payments using advanced digital platforms, such as BridgeTM Payments. Compared to manual processes, digital payment solutions are cost and time-effective. They also enhance the patient payment experience. Payment capturing should be done accurately for accounting purposes. Additionally, the provider must keep and present the records to the insurance carrier when managing claims. When done correctly, you can mitigate disputes and increase your cash flow.
4. Claim submission
After capturing the financial details for the service rendered, you must seek reimbursement from the insurance carrier. During the claims submission process, the insurance company will review the request to confirm whether the service falls within the coverage. In cases where the healthcare professional performed multiple procedures, separate claims may need to be submitted.
Claims submission is one of the most important stages in the RCM process. It directly impacts the organization’s financial viability by determining how quickly and accurately you receive payments due. As such, you must send clean claims and ensure proper coding to facilitate repayments. A clean claim contains all the necessary information and supporting documentation. Using a practice management platform can help streamline the process, reducing claims rejection. The software can also provide status updates to help you track progress.
5. Remittance processing
Once the insurance company approves your claim, the next stage is to process the remittance. The insurance company would send an explanation of benefits (EOB) to the patient, detailing how the claim was processed, considering the service rendered. The insurance company will also determine the allowable maximum amount a plan will pay for the covered healthcare service. The final process is contractual and non-contractual write-offs.
Contractual write-offs are rates agreed between payers and carriers and are usually unpreventable. Non-contractual write-offs are avoidable and can result from flaws during the claims process. As a pro tip, it’s crucial to review the process or reports regularly to identify and correct potential issues. Also, review your fee schedules periodically to ensure they align with adjusting rates, allowable, and contracts. Schedule fee is the amount the provider charges for each service.
Remember to follow up on outstanding payments or account receivables. A helpful tip is to assign staff to deal with such matters on an ongoing basis.
How Rectangle Health can improve your medical payment revenue cycle
Most healthcare practices take 30 days or more to collect revenue for services rendered, which can impact cash flow. Rectangle Health’s Bridge Payment helps to shorten this duration, leveraging an efficient and advanced digital RCM platform designed specifically for the healthcare industry. Automating workflows can streamline operations, reducing overhead and delays. Rectangle Health’s RCM platform unifies the front and back offices, ensuring proper coordination between departments and teams. This reduces friction and allows your practice to thrive.
Modern RCM tools can also optimize the pre-care process through the following means:
- Online registration: Patients’ expectations have changed with the emergence of diverse technology. Practice Management Bridge allows your patients to complete registration ahead of time, providing vital health insurance and health information online.
- Pre-payments: Bridge Payments lets you receive pre-payments, reducing days in account receivables. Point-of-service collection is a strategic approach to mitigating bad debts.
- Preferred payment methods: Patients value convenience, especially when making payments. Bride Payments allows patients to select from a wide range of options to complete transactions.
RCM digital platforms accelerate revenue generation in healthcare practices. That explains why one-third of executives in the industry are planning to automate two or more RCM functions (HFMA).
Uplift your RCM with Rectangle Health
RCM is an integral aspect of healthcare practice. Although the process can be complex, automation significantly improves operations. Rectangle Health has developed cutting-edge technology that streamlines the registration, scheduling, and payment processes. The platform has broad capabilities to support your practice.
Rectangle Health has provided innovative solutions to healthcare professionals and organizations for over 30 years. We have an extensive appreciation of industry demands and possess the resources to help you drive growth. We are renowned for providing excellent solutions and customer experience and are ready to help you scale. Want to learn how our platform works? Request a demo today!
References
HFMA. (2023, August 17). New report projects robust investment in healthcare revenue cycle and finance solutions, despite economic headwinds. HFMA. https://www.hfma.org/press-releases/new-report-projects-robust-investment-in-healthcare-revenue-cycle-and-finance-solutions-despite-economic-headwinds/
